Findings from a multi-firm review in the benchmarks sector can help all firms ensure their governance arrangements are calibrated effectively.
By Becky Critchley, Nicola Higgs, Rob Moulton, Jonathan Ritson-Candler, and Charlotte Collins
On 12 October 2026, the FCA published its findings from a review of governance at a sample of benchmark administrators. The lessons from the review should be of interest to all firms, as most of the findings are not specific to the benchmarks sector and so have broad application. They set out practical considerations for firms and clearly articulate the regulator’s expectations.
At the outset, the FCA explains that the most effective arrangements were those that supported constructive challenge, maintained clear accountability, and enabled follow-through on agreed actions. However, it emphasises that successful arrangements did not adhere to a particular structure, and it does not advocate a particular governance model, so firms need to focus on outcomes rather than on form.
The FCA also highlights the importance of good governance in allowing boards to focus on the matters in which their judgement adds most value, particularly given the risks, changes, and challenges facing firms in the current regulatory and global environment.
Link to Key Findings Key Findings
The FCA’s findings relate to five key areas, as detailed below:
Link to Board Composition and Capability Board Composition and Capability
The FCA encourages firms to consider whether their board continues to have the right collective capability to oversee the business effectively in the current environment. This is particularly relevant in areas such as technology, cyber resilience, data management, and innovation, where the pace of change means that the skills and experience the board needs may evolve over time.
The FCA emphasises that this does not necessarily mean that firms need to appoint additional directors or establish new committees. Rather, firms should consider whether the overall composition of the board supports a sufficient breadth of perspective and enables constructive challenge.
It also recommends that firms consider carefully the potential consequences of individuals holding multiple roles. In particular, firms should assess whether such arrangements could concentrate decision-making, reduce independent challenge, create conflicts of interest, or increase the firm’s dependency on key individuals.
Link to Board Engagement, Challenge, and Decisions Board Engagement, Challenge, and Decisions
The FCA observes that dense agendas or limited meeting time can make it harder for boards to focus on the issues that require the most judgement. Firms may therefore wish to consider whether the frequency of meetings, the design of agendas, and the allocation of time are proportionate to the complexity, scale, and risk profile of their business. Overall, the FCA found that board engagement appeared most valuable when the challenge raised by directors could be linked to a clear decision and resulting actions.
The review also found that governance records did not always clearly capture board decisions, the challenge raised, the rationale for decisions, and the resulting actions. The FCA is clear that firms are not expected to produce verbatim minutes; however, it highlights that concise records capturing these elements can help to support accountability. Similarly, the FCA stresses that, when important decisions are made outside of formal meetings, firms should ensure that such decisions are brought into the formal governance record.
Link to Governance Structure, Delegation, and Escalation Governance Structure, Delegation, and Escalation
For firms that form part of a wider group, the FCA found that shared group arrangements appeared most effective when the UK-regulated entity retained clear visibility of its own risks and regulatory obligations. Moreover, if individuals hold responsibilities across several entities or governance bodies, firms should consider how potential conflicts are identified, discussed, and managed in practice.
The FCA does not prescribe a single preferred allocation of responsibilities within groups. However, it considers it important that regulated firms are able to explain: (i) where in the group key risks are owned; (ii) how decisions are made; (iii) how matters are escalated; and (iv) how the UK-regulated entity’s obligations are reflected within wider group arrangements.
The FCA also underscores that clear communication channels and effective escalation pathways can help to support stronger integration between local and group governance arrangements, ensuring that relevant issues reach the right forum in a timely manner.
Link to Board Packs and Information Flow Board Packs and Information Flow
The FCA emphasises that the objective of board reporting is not to provide the maximum amount of information. Therefore, firms may wish to consider whether their reports clearly distinguish information provided for awareness from matters that require discussion, decision, or escalation.
The regulator suggests that a practical way for firms to test the effectiveness of their reporting is to ask whether it helped the board to: (i) identify a change; (ii) challenge an assumption; (iii) make a decision; or (iv) track an agreed outcome.
The review identified a number of ways in which some firms had improved their board reporting, including through: (i) the use of dashboards; (ii) clearer signposting; (iii) revised formats; and (iv) earlier circulation of materials. These provide useful ideas for firms to implement.
Further, the FCA observed that management information appeared most effective when the connection between the underlying information and the question being put to the board was clear. Reporting also seemed more useful when it highlighted changes, exceptions, and emerging trends, rather than relying mainly on static descriptions of current positions.
Link to Governance Assurance and Continuous Improvement Governance Assurance and Continuous Improvement
The FCA suggests that firms may benefit from adopting a more structured approach to assessing the effectiveness of their governance, as this can help them to identify practical improvements. It notes that such reviews can be conducted internally, although periodic independent reviews may also be useful.
Whichever approach is taken, the FCA stresses that the review should focus on outcomes (such as whether challenge actually affected decisions and whether escalation worked when needed), not simply on governance structures. It considers that appropriate assurance can help firms to understand how their governance arrangements support oversight, accountability, and decision-making in practice.
The FCA also considers that assurance is most useful for firms when any findings result in clear actions, ownership, and follow-through, and when firms are able to show how lessons learned have been incorporated into their governance arrangements.
Link to Next Steps for Firms Next Steps for Firms
Firms can use these findings as a practical framework to review their governance arrangements and check that they are meeting the FCA’s expectations. Equally, the findings offer firms an opportunity to consider where their arrangements could be enhanced to deliver better outcomes. Firms should reflect in particular about whether their board is able to make effective decisions and demonstrate effective challenge, whether board time is used efficiently, and whether any potential conflicts of interest are being addressed appropriately.